The political economy of moving up in global value chains: how Malaysia added value to its natural resources through industrial policy

Lebdioui, Amir ORCID: 0000-0003-3564-0422 (2022) The political economy of moving up in global value chains: how Malaysia added value to its natural resources through industrial policy. Review of International Political Economy, 29 (3). 870 - 903. ISSN 0969-2290

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Abstract

This article investigates the role of industrial policy in promoting upgrading in commodity sectors by examining the case of the petroleum, rubber, and palm oil industries in Malaysia. By doing so, it aims to contribute to an emerging scholarship that bridges the developmental state and the global value chains literature. Several findings emerge from this study. First, linkages do not unfold through market forces alone. Commodity value addition processes can be hindered by a range of barriers, including power dynamics alongside global commodity chains. The existence of high barriers for linkage development in developing nations justifies the need of state interventions. Second, successful government interventions for commodity value addition in Malaysia have gone far beyond fixing market failures and a ‘facilitative’ role of the state. Instead, the productive capabilities necessary for value addition were accumulated through coherent industrial policies and the strategic orientation of rents towards achieving productivity gains and learning. Third, political considerations, such the base of the ruling coalition, the regime type (marked by both executive dominance and political competition), and the influence of the regional intellectual climate, are essential to understanding both the policy will and ability to pursue a developmental approach towards commodity value addition.

Item Type:	Article
Official URL:	https://www.tandfonline.com/toc/rrip20/current
Additional Information:	© 2020 Informa UK Limited, trading as Taylor & Francis Group
Divisions:	IGA: Latin America and Caribbean Centre
Subjects:	H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HF Commerce
JEL classification:	O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O11 - Macroeconomic Analyses of Economic Development O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O13 - Agriculture; Natural Resources; Energy; Environment; Other Primary Products O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O14 - Industrialization; Manufacturing and Service Industries; Choice of Technology O - Economic Development, Technological Change, and Growth > O5 - Economywide Country Studies > O53 - Asia including Middle East Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q1 - Agriculture > Q17 - Agriculture in International Trade
Date Deposited:	27 Nov 2020 11:42
Last Modified:	17 Apr 2024 03:27
URI:	http://eprints.lse.ac.uk/id/eprint/107523

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